A new report has called for half a billion pounds to be taken from the budget for universities and used to fund professional and technical courses at further education (FE) colleges across the UK.
The report from the Policy Exchange think tank claims FE should be put on par with higher education (HE), which has seen its funding increase by 26% since 2009/10 while FE has seen a significant reduction, with the adult skills budget down 24% over the same period.
This means HE institutions have access to an estimated £12.3bn of unrestricted reserves – worth around 48% of the entire annual budget for the HE sector – while in contrast more than a quarter of the entire FE college network could effectively go bankrupt within a year.
The Higher, Further, Faster, More report calls on the Department of Business, Innovation and Skills (BIS) to redirect up to £532m of the Higher Education Funding Council (HEFCE) grant to improve the quality of higher level technical qualification on offer at FE Colleges, National Colleges and Institutes of Technology. Any remaining grant funding in this area should be directed towards universities with the smallest financial reserves.
The report also proposes an expansion of the university student loan system, as well as the introduction of maintenance support, to FE students.
Jonathan Simons, head of education at Policy Exchange, said: “The UK is home to world beating universities that we should all be proud of. But as well as degrees, we also need many more people with high class technical and professional skills – and that means a flourishing further education system.
“It is clear that higher education is significantly better funded than its further education counterpart. Universities have substantial cash reserves which could be much better utilised than sitting in banks. That is why we think a proportion of the Government grant to universities should be reallocated towards offering more students higher level technical qualifications at further education institutions, and why the student loan system should be expanded so that young people have access to finance to support their higher level study whichever route they choose.”
If implemented, the recommendations would help to tackle the skills shortage widely recognised in the construction industry. The report claims 20% more construction staff are required in London and the South East alone from 2014-17 compared to 2010-13, with a particular focus on skilled construction workers.
Steve Radley, director of policy at the Construction Industry Training Board, said: “This report offers a radical rethink of the way education funding is allocated.
“The UK lags behind the rest of the world in terms of how many of us undertake vocational education after secondary school. Just 10% of 25-40 year olds in the UK have a post-secondary vocational qualification, which pales in comparison to the US where 22% of the labour force has similar qualifications.
“Industry needs a reformed FE sector to provide the skills needed for productivity and growth. It is vital that we find the most effective way for FE to deliver this.”